New frequently asked questions (FAQs) were posted to the US IRS’s FATCA website on May 8 covering technical issues associated with the FATCA International Data Exchange Service (IDES). The FATCA IDES is an electronic delivery point where financial institutions and country tax authorities can transmit and exchange FATCA data with the US.
The FAQ changes are as follows:
Q: What is the difference between an IDES Alert and an ICMM Notification?
A: IDES issues email alerts via unsecured, plain-text email and they contain information about the transmission processing within the IDES system. An ICMM Notification is a “transmission” file archive that contains encrypted documents that are sent from the United States Internal Revenue Service (IRS) to a Foreign Financial Institution (FFI), direct reporting non-financial foreign entity (NFFE), or Host Country Tax Authority (HCTA) in response to the transmission of a FATCA Report submitted on the Intergovernmental FATCA XML Schema or the paper Form 8966.
Q: Will an API or standalone application be available to assist with data preparation?
A: IDES will not be providing an API or application for data encryption and transmission. The file format has been described and the file preparation guide has been published on IRS.gov to assist users. The IRS is currently looking into methods to provide additional technical support for issues related to data preparation. There are currently samples of Data Preparation code available on GitHub in the IRS.gov repository.
Q: I am a Sponsoring Entity located in a Model 1 IGA jurisdiction. I am responsible for reporting on behalf of entities in Model 2 and non-IGA jurisdictions. When I attempt to enroll in IDES the system rejects my enrollment as coming from a Model 1 IGA jurisdiction. How can I use IDES as required to submit FATCA Reports?
A:
The IRS developed a process that allows you to use IDES. You will obtain a second GIIN that reflects that you are located in a Model 2 or non-IGA jurisdiction.
1. Enter the IRS Registration Portal and create a new account.
2. Select the Financial Institution Type, Sponsoring Entity and click Next to continue.
3. Complete other questions and proceed to Part 1, Questions 3A-4.
a. Question 3: Select Financial Institutions Country of Residence, Other.
b. Question 3B: Enter your Financial Institution’s country/jurisdiction tax ID, if available.
c. Question 4: Select the Financial Institution’s classification in its jurisdiction of tax residence, None of the Above.
4. Complete the application and other entries as you did originally.
After the approved GIIN appears on the FFI List, use the GIIN to enroll in IDES. Detailed information on IDES enrollment process can be found at https://www.ides-support.com/.
Note: In order to be able to use IDES ahead of the June extended deadline for submission of FATCA reports for Model 2 and non-IGA jurisdictions you will have to obtain your new GIIN by May 21, 2015.
Q: When will sample XML files related to FATCA submissions be available?
A: Sample XML documents for the FATCA NIL reports, sender metadata, and notifications have been uploaded to the IRS.gov website and can be found at FATCA XML Schemas and Business Rules for Form 8966. Additional sample XML packets are being developed and will be posted on IRS.gov as soon as available.
Q: What is the difference between corrected, amended and void files?
A: ‘- Corrected Data (FATCA2) is used for records being re-transmitted after the IRS has notified the sender of a problem with the file or underlying data. Corrected Data should ONLY be used when responding to an IRS request to correct the data.
-Amended Data (FATCA4) is used to amend a record(s) previously transmitted to, received and processed by the IRS, but is later found to contain erroneous information.
-Void Data instructs IRS to disregard previously-filed records when data needs to be re-transmitted. Please see IRS Pub 5124 for specific scenarios where this would be required. The original records should be re-transmitted with code FATCA3 which instructs IRS to void the original transmission. After voiding records, the revised records should then be transmitted to IRS with code FATCA1 as New Data.
Q: I uploaded a FATCA Report to IDES 3 days ago. I received an Alert from IDES via e-mail that my file was successfully uploaded, but I have not received a Notification back from the IRS about the status of my FATCA Report. What could be wrong?
A: The IDES alert of a successful upload is information about the transmission of your file. IDES alerts cannot provide information about the receipt and processing of your files by IRS ICMM. The IRS should issue an ICMM Notification for every FATCA Report that is successfully transmitted through IDES letting you know the status of your FATCA Report. You should always receive a Notification within 24 hours, and in most cases within a few minutes, of the IRS ICMM system receiving your file. However, the IRS has identified specific instances during testing where ICMM Notifications are not issued to filers when certain errors are present. In addition, the IRS has identified circumstances in which filers did not download their notifications before the 7 day retention period expired, and these notifications were deleted and are no longer available for download. The IRS is working to address and resolve these issues.
In the meantime, there are a few things you can do to maximize your ability to receive notifications sent to you, and to determine whether a notification has been sent to in response to your file. These are as follow:
• First, make sure that e-mail alerts from IDES are not blocked as SPAM by your own e-mail system. Your e-mail system may have deleted it or may have sent it to you SPAM inbox. If you have been sent an alert that a notification is present, but the alert email is blocked you may never be aware of the notification’s availability for download.
• Second, make sure your IDES User Profile is configured to allow IDES to send you e-mail alerts, including those regarding notifications. There is a box that can be set to either send or not send you email alerts. If you would like to receive email alerts, including those about notifications, make sure it is set to send e-mail alerts.
• Third, check your IDES inbox over the next 24 hours following the upload of your file to IDES to determine whether there is a Notification waiting for download. Even if you have not received an e-mail Alert, the Notification could still be in your folder ready for download. After seven days the notification will automatically be deleted from the system.
If you have checked your folder in IDES and there is no Notification present after 48 hours or longer since your file was uploaded successfully, an error types which is suppressing a notification from being sent may have been detected on your file. A few things to check that may help include the following:
• Making sure the digital certificate you are using for signature and encryption for FATCA data has not expired or been revoked by your Certificate Authority.
• Also, you should double check the Metadata XML file that is part of your data packet, to ensure all of the mandatory data elements are correct. In particular, please make sure that FATCAEntCommunicationTypeCd is set to “RPT”, and that the TaxYear is set to “2014.”
• Make sure all of the entries are correct. Did you indicate you were submitting a FATCA Report? Did you select the correct tax reporting year (it should be 2014)? Etc.
After you’ve checked these items, you should resubmit your file.
Q: I have performed all of the above checks and I still am not receiving a notification. Is there anything else that could be causing the issue?
A: It is possible that you submitted your production files to the test environment instead of to the production environment. If this happened then you may not receive an ICMM Notification. Any production files that are submitted to the test environment will not be processed and will need to be re-submitted to the production environment. Please do not submit production files to the test environment. In addition, please do not submit test files to the production environment.
Q: We’re receiving an alert that there are too many files in package (RC026). What is wrong?
A: The data packet to be transmitted is an archive in .ZIP file format. For Model 1 and 2 IGAs, this packet should include 3 files (FATCAEntitySenderId_Metadata.xml, FATCAEntityReceiverId_Key, and FATCAEntitySenderId_Payload). For Model 1 Option 2 IGAs, the packet should have 4 files, all of those mentioned previously plus the HCTAFATCAEntityId_Key. You are receiving RC026 because for your respective jurisdiction, there are more than the 3 or 4 files in the data packet.
Q: Can the IRS provide additional detail regarding proper preparation of data for submission to IDES?
A: The IRS will continue to update the FAQ and the data preparation section of the IDES User Guide in response to inquiries regarding data preparation.
There are currently samples of Data Preparation code available on GitHub in the IRS.gov repository.
Q: Are you sure an SSL certificate can be used the way IRS plans? This appears to be different from its intended purpose
A: SSL certificates are intended for use on a web server. IRS has successfully used SSL certificates to verify digital signatures and encrypt AES keys during testing. However, IRS acknowledges that it cannot verify test all the software that partners might use, and so incompatibilities are possible. IRS is exploring options to approve other types of plans to approve one or more digital certificates that are not designed for use on a web server.
Q: During testing, we have experienced issues with decrypting the notification file. Are there any lessons learned or best practices that you can share?
A: The IRS is currently developing information on variety of methods that can be utilized for decrypting the notification file. There are currently samples of OpenSSl commands for decrypting notifications on GitHub in the IRSgov repository.
Q: How do I submit the FATCA XML Schema if I am a U.S. Withholding Agent (USWA), Territory Financial Institution (TFI), third party preparer, or other entity that is not required to have a GIIN?
A: Certain entities, such as USWAs, TFIs, or other third party preparers (not sponsoring entities) submitting information on behalf of another entity, are not required to register or to obtain a GIIN and, therefore, should not do so. USWAs, TFIs, and other entities that are not required to have a GIIN (“non-GIIN filers”) must follow the procedure, below, in order to obtain a FATCA ID number (FIN) that they will use in lieu of a GIIN to enroll in and use IDES (including submitting an Intergovernmental FATCA XML schema v1.1 (electronic Form 8966)).
The FIN, along with the associated identifying information that you provide, will be treated as return information by the IRS. This FIN and the associated information provided will be used by the IRS to validate the non-GIIN filer’s IDES enrollment and submission of files via IDES and for other FATCA purposes. The FIN, but not the associated information (such as your name), will be published on the Foreign Financial Institution (FFI) List to facilitate the IDES enrollment and your submission of files via IDES. For more information about the FFI List, see IRS FFI List FAQs.
Your published FIN will be accompanied by a generic name (e.g., “U.S. Withholding Agent 1”) on the FFI List, and publication of your FIN on the FFI List does not change your status for FATCA purposes. That is, having your FIN published on the FFI List does not make you an FFI, and the FIN does not serve any function related to withholding tax on payments under FATCA.
Note: In order to request a FIN, you must consent to the IRS’s publication of the FIN on the FFI List because the FIN is return information. Visit the IDES Resources page for more information.
Q: How do I complete the FATCA XML Schema if I am a U.S. Withholding Agent (USWA) or Territory Financial Institution (TFI)?
A: If you are a USWA or TFI, you complete the FATCA XML Schema in the same manner as if you were a “ReportingFI”. In the “TIN” data element, make sure to use your U.S. EIN (or, if you are a TFI that does not have a U.S. EIN, use the EIN used by the relevant U.S. territory tax administration to identify the TFI).
Note: For reporting with respect to calendar year 2014, a USWA or TFI with a filing deadline of March 31, 2015, has until June 29, 2015, to submit the FATCA XML Schema. For additional information, please read FAQ Q2 under the “Reporting” section on the General FAQ page.
Q: How do I complete the FATCA XML Schema if I am a third party preparer or other entity that is not required to have a GIIN?
A: If you are a third party preparer (not a sponsoring entity) or commercial software vendor and you are submitting the FATCA XML Schema on behalf of another entity (or on behalf of several other entities), enter your FIN, which you obtained to enroll and use IDES, in (1) “SendingCompanyIN” data element in the FATCA XML Schema Message Header and (2) “FATCAEntitySenderID” data element in the FATCA XML Metadata Schema.
Note: For reporting with respect to calendar year 2014, a third party preparer or commercial software vendor filing on behalf of an entity with a filing deadline of March 31, 2015, has until June 29, 2015, to submit the FATCA XML Schema. For additional information, please read FAQ Q2 under the “Reporting” section on the General FAQ page
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